Would Drivers Be Better Off As Uber Employees?

In case you’re unaware, there is a massive legal battle going on right now between Uber and three of its drivers in California. On the surface, that might not seem like a big deal but these three drivers could ultimately change the way Uber’s entire business model operates if they are successful with this lawsuit.

At stake, is the vaunted ‘independent contractor’ classification that Uber and most other on demand companies apply to their workforce. It’s estimated that companies like Uber save up to 30 percent of payroll tax costs by classifying workers as independent contractors instead of employees. And when you have a few hundred thousand employees, that’s a whole lot of cash at stake.

Would Uber Drivers Be Better Off As Employees?

This is obviously a hot topic right now because the impact of this one case could have a long-lasting effect on the entire on demand economy. Shannon Liss-Riordan, the lawyer representing the three drivers in CA is also bringing similar cases against Lyft, Homejoy (now bankrupt), Postmates and Caviar.

If you’d like to catch up on what I’ve written on this topic in the past, here are a few good articles:

Thursday’s Class Action Hearing

Last Thursday, in San Francisco, Judge Edward Chen heard arguments in regards to whether these three Uber drivers would be allowed to represent the 160,000 Uber drivers in California in a class-action lawsuit. It’s important to note that this case will only apply to California Uber drivers but it will obviously have a huge impact on future cases in other states.

I won’t get into the minutia of the hearing but suffice it to say that the verdict for class action status is still up in the air. Ultimately, whatever Judge Chen rules will likely be appealed anyways so this will be a very long and drawn out process.

Judge Chen: “I intend to go forward on this and rule and throw the dice. The chances are a higher court will have a look at whatever I do.”

I didn’t attend this hearing but I’ll likely go up to San Francisco when the actual trial starts (next year). I did however follow the live tweeting of some reporters that cover the industry. I definitely suggest you guys follow them so you can check out their rideshare coverage. And I also linked to the articles they wrote about the trial, if you want a more thorough recap.

Even though I wasn’t there, my impression is that the judge in this case is not a huge fan of Uber, or their business model. His job is obviously to remain an impartial mediator but throughout the hearing he appeared to take subtle jabs at Uber and especially their contention that they are simply a technology company that connects drivers with passengers.

Drivers have known this argument is bullshit for a long time and here’s Judge Chen delivering a couple zingers from the bench:

Judge Chen, smirking: “If you were confident in your case, it would be a good gamble.” — Susie Cagle (@susie_c) August 6, 2015

Judge Chen: “Is Uber truly going to say it did not have the authority & the right to control someone” w/ a low star rating? Uber atty: “Uh” — Susie Cagle (@susie_c) August 6, 2015

SLR Knows Her Stuff

One person who’s really impressed me so far is Shannon Liss-Riordan, the lawyer representing the three drivers. I have a pretty strong bias against lawyers in general, but she is one of the more passionate and knowledgeable ones. Riordan has really proven herself so far, and if you listen to some of her arguments, you can tell that she fully understands what it’s like to be a driver.

As I was reading the tweets, a lot of the comments/retorts I was thinking about in my head, Riordan brought up on her own. I often read media articles from reporters and communications from Uber that show a clear lack of knowledge when it comes to what it’s actually like for drivers out on the road.

I’m not saying being an Uber driver is rocket science, but there are lots of things that you would only know about if you’re a driver yourself. And somehow, Riordan seems to pick up on a lot of that.

Not Impressed With Uber’s Lawyer

Uber’s lead counsel, Ted Boutrous, has experience arguing before the Supreme Court, having defended (and won) a similar case for Walmart years ago. But I just don’t think he’s doing a very good job right now. His arguments seem weak and flimsy to me and it looks like Uber is basing their whole case on what drivers want instead of legal precedence.

I’ll get into what drivers want and what outcome could be best for drivers below but I can assure you that what drivers want should have no effect on the outcome of this case. Uber submitted as evidence, 400 cherry-picked driver statements that said drivers prefer being IC’s to employees. But the judge quickly laid the smack down on Uber pointing out that 400/160,000 is only .25% of all Uber drivers and it wasn’t even a random sampling.

Riordan on the other hand, jumped on this opportunity during the hearing and said her paralegal called 50 of those drivers and many of them actually didn’t understand what they were submitting on Uber’s behalf once it was explained to them.

When Will We Know The Ruling?

We won’t know Judge Chen’s ruling for a few weeks but if I had to guess, I would say he’s leaning towards some type of class or multiple class certification (ie. fleet owners, part-time UberX drivers, full-time UberX drivers, etc). This is where things get a little fuzzy for me on the law side of things but I suspect that a class certification just means that potential damages could be higher.

Like a normal class action, drivers will have the opportunity to opt out if they choose and/or pursue legal recourse on their own. I suspect that class-action status is a good thing for drivers since it means more is at stake for Uber and they are going to take this issue even more seriously.

The actual trial is still a ways off and likely won’t happen until next year (2016).

What This Means For Drivers

If you’re a current Uber driver, you’re going to be hearing a lot about this case, but the final outcome may be years away. From polls I’ve done in the past, and drivers I’ve talked to, it’s pretty clear that most drivers want to remain independent contractors as opposed to becoming employees. And I completely understand why.

When the word ’employee’ comes into our head, it probably brings back terrible memories of sitting in a cubicle, clocking in at 9 and leaving at 5, listening to some idiotic boss go on and on about trivial stuff, etc.

Most people who drive for Uber really do value the flexible schedule that driving affords and the ability to be their own boss. There is no doubting that.

Uber’s Attack on Flexibility

But Uber has really pounced on that uncertainty of what would happen if we became employees and I think they are using that to unfairly scare drivers into supporting them. Uber’s whole argument up until this point has rested on drivers losing flexibility with employee designation.

During the hearing, they presented 400 testimonials from drivers who said they value the flexibility of driving for Uber and don’t want to lose that if they became employees.

David Plouffe went on NPR and talked for 20 minutes about the flexibility that drivers have.

If Uber wasn’t so adamant about jamming this flexibility argument down our throats I may not have noticed it, but after hearing about how drivers love the flexibility for the 1,800th time, I started thinking to myself: ‘Why would the flexibility disappear if Uber drivers became employees?’

It’s true that traditional employee roles have offered very little in the way of flexibility but there’s nothing set in stone that says employees have to come in at 9 am and leave at 5 pm. It’s more tradition than anything else.

I know a lot of drivers are worried that if we were to all become employees then we’d have to clock in and clock out like a regular day job or schedule our hours in advance. And you’re right, that schedule would suck for a lot of drivers but the thing is, that schedule wouldn’t work well for Uber either.

Uber’s busiest times (rush hour commutes and weekends) don’t line up well with a 9-5 type job. That’s why they use tactics like guaranteed pay and surge pricing to get drivers out on the road when demand is at its highest. As it stands now, drivers are free to log in and out whenever and wherever they want. If drivers were all employees, there is nothing that says drivers wouldn’t keep that same flexibility.

Uber Can Make It Work

Let’s not forget that Uber is a $50 billion dollar company and one of the ways they got to this point is leveraging independent contractors. This business model has worked well for drivers but it’s worked way better for Uber.

And who’s to say that Uber couldn’t hire a mix of independent contractors and employees? I think if Uber had employees to handle the baseline demand and contractors to handle overflow, that would be a system that could work out very well.

In fact, many traditional businesses already do this. They hire W2 employees and whenever they have big projects or temporary work, they hire contractors, pay them a premium and they get the job done. Uber would be able to offer the exact same thing during times of high demand when they need more drivers.

Right now, Uber is using a smart PR strategy to try and make it seem like there are only two options: independent contractor – good OR employee – BAD. But the reality is that even if Uber lost this case, they are a very smart and creative company, and it by no means will be a crippling death blow to their business model.

Drivers Deserve Worker Protections

What it really boils down to in my mind are the worker protections. There’s a reason why people have fought so hard for and voted for things like unemployment, disability insurance and social security. Without those protections, workers can get screwed very easily.

I think a lot of people are thinking about this issue without taking into consideration the longer term effects. Right now, I usually tell people that being an Uber driver works best on top of another more stable, job with benefits.

Part-time drivers like myself like to complain about the high cost of gas and depreciation on our vehicles but there are full-time drivers who need to buy health insurance, save for retirement, build up an emergency fund in case they get sick or their car breaks down and more. It’s very tough to do all that right now as a full-time Uber driver.

Those drivers would obviously benefit a lot from becoming employees but the reason why it’s so important for the rest of us is simple: we are seeing a monumental shift in our labor workforce towards 1099 style of employment. Driving for Uber is great if you have another more stable job but what happens when that stable job decides to start hiring solely 1099 workers?

We are moving towards an on demand style of employment, not away from it and if you think there’s an industry that’s safe from Uberization you need to think again. Big businesses are always looking for ways to cut costs and if Uber can do it, so can they.

A True Independent Contractor

Going forward, I think we’re going to see Uber more clearly delineate the line between independent contractor and employee. We’ve already seen them change position on things like rideshare advertising, tipping, and even the deactivation cut-off rating.

In 2014, their policy was that you could be deactivated for promoting other companies or showing ads to your riders. But with the impending lawsuit, they now tell drivers that it’s highly discouraged. See, they can’t tell you no anymore.

Here’s what I think a true independent contractor relationship should look like:

Set My Own Rates: In my mind, this is at the top of the list in a true independent contractor relationship. Right now, a $4 minimum fare that nets a driver $2.40 is a money loser. There’s really no elegant way of saying it, but you are probably losing money on these rides. Unfortunately for drivers, there’s not a whole lot you can do about it. Drivers should be able to raise their minimum fare and raise the rates to whatever they think is acceptable if this is going to be a true IC relationship.

No Deactivations: If Uber truly is just a technology company, they shouldn’t be allowed to ban certain partners from using the app. Lots of drivers feel that the rating system is unfair and works against them but if there was no threat of deactivation, riders would see their potential driver’s rating and then decide if they still wanted to ride with them or not. If a rider saw that their driver was only rated 4.0, it should be up to them whether they want to get in the car or not.

The Real Problem: Both Classifications Suck

If you asked me today what designation I prefer, I would say independent contractor. But there are a whole lot of caveats behind that. In reality, I don’t think either classification makes a lot of sense since they were invented at a time when lawmakers didn’t even know what the internet was.

But the reason why I think this lawsuit is a good thing is that it’s going to force Uber to do a few things:

Clearly delineate the line between IC and employee: This court case is going to be years in the making and will likely be appealed all the way up to the Supreme Court, especially if Uber keeps losing. Uber could 100% make it work with an all employee workforce or a mix of employees and IC’s but plain and simple: that will cost them a lot of money. We’re already seeing some examples of this, but going forward, Uber will make it a priority that drivers are seen as independent contractors. I suspect whatever aspects of control the courts start to harp on, those are the exact things Uber is going to start changing. That way, if the courts look at the fact that drivers can be deactivated for any reason and say that is akin to an employer/employee relationship, Uber would likely use a strategy like the one I mentioned above that would put the choice in the rider’s hands. That way, they solve that problem and while they can’t do anything about past indiscretions, going forward, they stay within the realm of the independent contractor relationship.

Offer employee positions to some drivers: There’s really nothing that says Uber can’t hire a mix of employees and IC’s. Many traditional businesses already do this and it would be very easy for Uber to baseline demand and allow employees to sign up for hours accordingly. Honestly, I think driving for Uber as an employee would kind of suck but at this point, it’s such a small minority of drivers, it might cost Uber a lot less to just let them be employees if they really want to. I don’t even want to think about how much it costs to have Ted Boutrous on retainer 🙂

Force Uber to push for new legislation: Ultimately, what I want for drivers is to maintain the same level of flexibility but get more worker protections. I think it’s short-sighted of drivers to be content with the way things are now because I think they can be a lot better. Driving for Uber really does deserve a whole class of its own in order to ensure that workers are protected but they’re still afforded the flexibility that drivers and Uber both value. This would be a monumental task and there’s probably only one group or organization that could pull it off: Uber.

I’m sure there will be lots of different opinions on this article, but anyone who says this is a clear cut issue is not thinking about the bigger picture. There is a lot of room for compromise but drivers won’t always have the leverage that they do now. Sure, things are ok or even good for many drivers right now but if you look at the way things are trending, things are getting better for Uber and worse for drivers.

It’s important to step back at times and look at the bigger picture. You may be able to make more money, save more on taxes and run your own business today with a lot of success, but what’s going to happen in a year or even five years down the road? As we’ve seen, there are a lot of people that qualify to drive for Uber and are willing to drive at rock bottom prices.

I think a lot of drivers like being an independent contractor, but what they like even more is the flexibility. Whatever model Uber ends up deciding on, there is nothing that says drivers have to lose that flexibility. So the next time Uber threatens you with this, don’t be afraid to ask why. Uber is jamming this notion down everyone’s throats that drivers would lose the flexibility that they currently enjoy. But if you think about it, there’s no law, there’s no corporate decree, there’s nothing that says this has to happen.

Personally, I like being an independent contractor but I also know that this set-up probably isn’t going to work out real well over a long period of time. Now is the time to really push for more protections for drivers and let your voice be heard. Ultimately, Uber is going to do what’s best for Uber but whether you agree with lawsuits like this or not, it provides a real opportunity to make things better for drivers.

As you can see, it took over 3,000 words to get my points across so clearly it’s a very complex issue. But I would like to hear from all of you in the comments. I think the reasons for becoming an employee are pretty obvious but if you want to stay an IC, I want to know, what aspects of being an IC do you really value that would disappear with employee designation? Additionally, do you think the way things are now with IC’s and Uber will result in long term success for drivers? What if other industries start shifting towards 1099 style of employment if Uber wins this case?

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I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder.

Very interesting points, especially where they have to get away from “forbidding” actions like promoting other companies. Also, I’m sure the ruling with Uber would likely affect Lyft and Sidecar in some way too.

Yes, I e-mail Uber support A LOT so I’ve seen them first-hand change many of their policies like this in what appears to be a direct response to the lawsuit. And yes I suspect whatever happens in the Uber case will trickle down in-directly to all the others.

Lyft will have a similar class action hearing in December.

Don Anderson

Incidentally, Uber did not invent any of this. They just copied the “our drivers are independent contractors” claim from the cab industry. Though, in doing so they overstepped many of the bounds the cab industry had followed to keep this status (for instance, by taking a percentage of the fare).

It would be interesting to see if this spills over, not just to Lyft and Sidecar, but to cab companies in general.

LOCO SF

SF cab drivers are each individually licensed but are covered by Workers Comp insurance through the cab company.

Don Anderson

A good point. In California, although cabdrivers are generally treated as independent contractors, they have some employee protections such as Workers Comp. My understanding is that these are concessions won over the case of several decades of court cases. The result being that the legal status of cabdrivers in CA is not completely clear; maybe the Uber case will clarify it.

afl

If drivers become employees, and Uber has to cover the incremental costs associated with that I expect pay gets WORSE not better. They are already pushing prices down, and lowering pay as a result. I think they would need to take a bigger than 20% fee to cover all the incremental costs which would continue to push pay down. I don’t see them pushing prices back up do you? I think IC is the only way this model works.

Tom Houston

By the way Harry nice article! This is Tom Houston. With regards to this comment your wrong that pay would get worse. In California minimum wage is a little over $10 per hr on its way up to $13. Plus in this state you receive 57 cents per mike.i work and live on the west side of LA. Our per mile is $1:00 plus 18 cents per minute. I average about 800 to 1000 miles per week 1000 miles at 57 cents is &570 plus 40 hrs would be another $400 when minimum wage goes to $13 per hour that would be $520 for a total of $1090. Plus I would have all the benefits on an employee. I have never made that as an IC. I’ve worked for 9 months . And that would be consistent or close every week. The Only benefit now is flexibility. And I can assure you should we be classified as employees unit organizers would be lining up to represent us and negotiate nuch better numbers then I just showed you. It could be a true middle class job that you could sustain a living. Right now we’re the equivalent of sharecroppers. We pay for gas maintenance and the most important thing we DO NOT get to set our own rates or accept tips. The true essence of IC.

afl

Good input and good points. But where is all this money going to come from? I expect there is a point at which customers will stop riding as frequently when rates start to significantly increase. Do you think customers will be willing to pay 3X or 4X for the same service? I don’t.

Good points made by Tom and I tend to agree. With the current IC system, there’s really no floor to how low rates could go. Employee designation would put a floor on pay (minimum wage, benefits, etc).

Where will the money come from? That’s pretty simple in my mind – Uber has tons of cash and tech solutions at their disposal. Just look at uberpool which cuts the rate nearly in half for riders. Let’s say they cut it by 25% instead and now they can pay for employee pay for drivers and riders actually save money.

Money is the least of their problems for now. Their goal is to make money. Any additional expense will come out of our pockets sooner or later.

You make an excellent point that flexibility does not need to change. Another misconception that I have heard is that we will finally be able to unionize, but there is nothing stopping us now, per one union web site and it has happened here in IL for homecare workers. Uber may be worth $51 billion, but they have “only” $6.9 billion invested and they have been losing $55 million per month – based on $415 million in revenue and 1 million rides per day at ~$14 per average ride, not all are UberX.

What will be different? Payroll taxes are 7.65%, so Uber could just up their take from 20% to 25% and about break even. Health insurance is another $16,000 per year on the average per the Kaiser Family Foundation/Health Research & Educational Trust , so that would take another $320 out of our pockets per week or what is stopping Uber from stopping the app at 129 hours a month so they would not need to pay for health care? Some drivers will try to scam the system and drive as little as possible, so you will have to subsidize them until Uber lets them go.

Bottom line, Uber may lower pay to minimum wage and lower the mileage pay to somewhere less than $0.575 per mile. Maybe they will raise the rates to taxi rates and lose that competitive advantage. Or a little of both – lowering costs and raising their revenue.

Tom Houston

First of all health ins.is not &325 per for us that the total which uber would pay most of second they wouldn’t be taking another 25% as we would. Be hourly. Ian’s third do you really believe those loses? If those numbers are true then VC would be running for the hills. It’s all a matter of how you account

Tom Houston

Yes I do! Right now ubers rates are ridiculously low. Taxi cabs are are 3to 5x higher they could double there rates and people would still pay. There are no other alternatives. Do you think uber would go out of business?

Louise Cook

Customers were fine with the fares eighteen months ago, that were twice as much. Typically it costs companies about 30% to provide basic benefits to employees.

Louise Cook

A very thoughtful, articulate response and I agree. Some of the comments imply that Uber drivers are a world apart in temperament and willingness to be subject to rules. We could set the rules. Don’t we operate as ICs as if we are employees by keeping our cars clean, being friendly, seeing to our clients’ needs, having the choice to work at odd hours if we can make more money, and subject to customer ratings. With part-time employees, Uber would not have to comply with a lot of of the laws and regulations that pertain to full-time workers.

Why do you think you will get to work 40 hours per week when Uber can avoid health insurance if they limit you to 30 hours per week?

John O’Connor

Willie, your link answers your question.

23 cents “only” relates to relocation. The rate companies are required to reimburse employees for using their personal vehicles for business purposes is 57.5 cents. There is no “as little as” scenario.
Mileage Reimbursement Rates for 2015
Personal Vehicle – 57.5 cents per mile
Personal Vehicle (state-approved relocation) – 23 cents per mile

Willie Wilmette

John, you are reading way too much into this.

This site is just for employees of the State of California, not employees in the State of California.

Nowhere have I seen a minimum rate per mile, please show me your source.

57.5 cents is the maximum, not minimum, deduction allowed by the IRS and is widely adopted by companies (who do not want to look cheap). I no longer work for a package delivery company who paid no mileage, just a per box fee.

John O’Connor

I stand corrected. Thanks for taking me to school Willie. 😉https://www.timesheets.com/blog/2014/11/paying-employees-more-or-less-than-the-standard-mileage-rate/
From bottom of article:
“Mileage Reimbursement and Employee Retention: … Unhappy employees don’t take care of business very well so it’s better to make employees happy…And lastly, it is actually pretty common for employers to reimburse their employees for mileage. A BLR Survey found that 73% of respondents (144 in total) reimbursed employees the max IRS rate.”

John O’Connor

Again, thanks for the clarification Willie. In my previous jobs, I always received the max IRS amount, so I assumed that was required. Note, I’m guessing Lyft and Uber would pay the full amount as it would not look good if one reimbursed less than the other.
I think minimum wage + 0.575 reimbursement + tips (needs to be added) + a small % (10-20%) of fare would be a win/win for Uber and their drivers. Uber could increase the base % to incentivize working during prime times. And I would not be surprised to see Uber willing to pay overtime if drivers drove 40+ hours. Current rates would need to increase back to level they were 2 years ago. That’s still much less than a taxi.

Will Mette

You think this because Uber has been soooo generous in the past? One Rideshare Guy broadcast said that for every mile driven for pay there are 1.5 miles unpaid. If that is correct, I am currently getting 36 (29 after Ubers cut) cents per mile now, not 57.
Somehow raising Uber’s expenses will make them want to do us more.
The best that could happen is that taxi companies must have to follow the same rules.

Tom Houston

So what do you think is the best solution? Do you think the current IC program works? Also as employees we have protections built in so there are no blatant abuses and if there are you have recourse.

Paul Wolff

Harry,

First I Respect your intentions & I am a big fan of yours. But the poll you
speak of with John Denver, regarding drivers wanting to remain IC, probably
isnt all fair…..because:

#1 you include an option for a Hybird “Dependent Contractor”
– & in my opinion that is exactly what we are (but my idea of what a
dependent contractor may vary a lot from what you might call a dependent
contractor)……….but……. there is no such thing!! Its like saying
I am Alien of Pluto. How do know theres aliens on Pluto? Have you ever seen
one? Describe one to me?

As John says its undefined, being there is no such thing as a
“Dependent Contractor”, there is no definition of it, so how can
anyone truly vote & say thats what they want to be? So the poll itself is flawed. Sorry but true.

#2 There is 170 votes on that poll.
You have suggested & wrote before that Uber hires something like
20,000 or 30.000 new drivers a month. Without doing the math the 170 voters
becomes like 1 zillionth of 1 percent, not exactly an accurate poll.

#3 I also say this, of that 170 voters, these drivers that CARE, regular
drivers, drivers ….still…..actually driving, drivers that are making at least
decent money doing this, & want to make more, which for all we know may not
even be 1 % of ride share drivers.

If Uber hires 20 to 30K drivers a month Id guess that they lose about
95% of each month as well, & Id
venture to say almost none of them voter on your poll. Where do you think those drivers that have
quit driving would vote? Employee or
IC??

Harry, what I am saying to you is in Respect, your audience (the 170 voters)
is a very small piece of the pie, too small to be accurate & it is a
probably a biased piece of the pie, in that these are primarily drivers, that
have care, learned, educated, & mastered ride sharing for the most part,
probably the upper 1% of drivers. So of
course they are making decent money (of course in part because of YOU, &
your help) so they want the status quo to remain.

After all, don’t we all want ……..what serves US best. Not necessarily what is fair or righteous? And if you should find yourself saying…….I
want what is fair & righteous, not what is best for me. Then the next thing you should do, is #1 go
get a chauffeurs license, pay hundreds of for a permit, & get vehicle
inspection & subject yourself to the legal regulations that as taxi
is. Because this is how they feel, right
now! They feel cheated, & treated
unfairly, because they MUST jump thru all these hoops that us as ride share
drivers don’t have to.

We naturally tend to vote for what is in our own best
selfish interests! And simply put drivers that read RSG learn to master ride
sharing & profitability, that’s Harrys goal, “My goal is to help drivers earn more money by working
smarter, not harder”. So that to makes your poll biased as well.

I based my findings/analysis off everything I can get my hands on though. I come in contact with a lot of drivers so do my best to take into account what they feel but it’s always possible that they don’t realize what’s best for them.

The goal of this article isn’t to tell anyone they’re wrong and I’m right but simply to think about the bigger picture. The bigger picture is that IC is great for some right now but going fwd, we need something better.

John O’Connor

Thanks for the mention Paul. I have to say, I think Harry is slowly working his way toward the full W2 argument. This article is proof of that. Good comments by everyone.

Marc Borgens

I like the IC model and as employees they could run a flexible scheduling system but it would have to be done by setting up shifts and limiting the drivers needed and finally sorting by seniority to keep the full time drivers happy. I don’t know how the pay works for employees but I still think it goes down, just my opinion

Why would it have to be like that? Why couldn’t it be exactly the same as it is now?

We really just don’t know so to posture one way or the other is simply guessing. I do know that unemployment, paid time off, etc would be good for drivers though.

Louise Cook

I made a similar argument about the CA Labor Commission decision, and I received the same response: “We want our independence.” As you reiterate, every employment contract can be negotiated and revised as long as it doesn’t violate federal or state law law. Employers who value their employees make changes to accommodate working at home, time off for adoptions, caring for family members, paternity leave, and many other factors. All of these things are subject to negotiation. Right now, however, it would be a violation of federal law for groups of drivers to sit down with Uber officials to discuss anything about payment, hours, etc.The law covers a wide spectrum of issues, but the part that pertains here is called “collusion.” It’s designed to prohibit monopolies. For example, let’s say all cell phone providers got together and decided that they were all going with the same fee schedule. It’s unlawful because it represents a monopoly.

Paul Wolff

One thing that isn’t mentioned in this discussion is……. Uber
operating as an employer. I think, most of us drivers I think would
agree, that Uber doesnt treat us that well as “Independent
Contractors” even if they do call us “Partners”, & I also think most
of us think, if they don’t treat decent as ICs, it would only be worse as
employees.

Most of us are ICs because we are slightly different breed
than most of the working class, we have OUR WON ways of doing things, we are
slightly stubborn, & very Independent. AND…..many of don’t like working for
others…….because…….. we don’t Trust others (companies), so we would rather do
it on our own! Many of us have probably
worked for companies & have been wronged by them. By being an IC it enables us, maintain more
control, & become less likely to get screwed over, as we largely work for
ourselves. But……….I am positive
everyyyy Uber driver has felt screwed over by Uber at least more than a few
times, whether that, a cut in rates, improper pay (missing a ride..flagged
rides), not answering questions, or answering them directly & so on.

As Drivers we see 1st hand what most riders don’t
see, & that is Uber only cares about themselves. I think most of drivers FEAR, working for
Uber as an employee……because…….they don’t treat us all that well as ICs….&
to give them even more control over as driving employees scares the hell out of
us! LOL

Paul Wolff

Also what isn’t being discussed is this……ultimately our
Government founded on the premise that it acts on behalf of the people! The
largest group of people in this ……are the riders! The riders WANT UBER! Just as the people wanted alcohol during Prohibition,
so Uber WILL LAST!!

The only question is HOW? Under what regulations? Under what
laws? Not is Uber facing the employee vs
IC battle. Which if Uber loses, faces a
mountain of other issues. That will
raise costs significantly, like payroll taxes, providing Health Ins, Work mens
Compensation, unemployment costs, FULL auto insurance (not just when you are on
a ride but ANYTIME an employee is clocked in), possibly raising wages due to
Unions, Im sure the Teamsters would love to have all us Uber drivers in their
Union as well! And what about Uber drivers having to meet the same regulations
as taxis do. Licensing & permits
etc..

Very quickly & suddenly you can see Uber having to raise
their prices, & this then makes us VERY competitive with the pricing of
taxi companies.

Uber argues that they are tech company…..right? Or even if they argue they a matching or
finders fee company…….ie: Matching rider with drivers……… or finders fee type
company……WHY does Uber:

#1 charge $1 for a
safe riders fee?

#2 Have & pay for a $1,000,000 Auto Insurance policy?

Since when do Tech companies have to buy $1 million auto insurance
policies?

Simply put Our Labor Laws are outdated, its just that when
they were written, they had no idea of the internet. New laws & maybe even another labor
classification says Harry as expertly suggested needs to be discovered. But I
do believe in our Country, & I believe & hope the will of the people is
done! Uber is a good thing….& an ingenious idea! And is probably saving thousands of lives
from drunk drivers, we simply need our government to step up, put some laws
into place for ride sharing.

As far as flexibility is concerned, Uber is trying to act as
employees we would lose flexibility, so NOT TRUE!! Otherwise how would business operate being
open 24 hours a day? Why would
bartenders, waiters & waitress’ work evenings, why would retailers be open
on the weekends etc… All these business
ask on their applications ……”when are you available to work?”

Also as some have suggested, this isn’t to say Uber couldn’t
employee some full time drivers & hire IC to work peak hours. This is VERY doable! Uber is simply fighting it because its costs
more to do so! ANY business is designed
for 1 reason only …..& that’s to make a profit! Uber is acting in their best interest to make
the most profit possibly, as they should, it’s the reason ONLY to be in
business! Just as ICs we want anything
decisions that help us make more money too!!

But just as we as driver must operate within the rules of
the road, Uber too, should have to operate within the rules of Federal, State,
Local labor laws, & right now Uber is operating in a gray area.

In my opinion, this isn’t Ubers fault, they are simply doing
what ANY business SHOULD do, & that’s trying to make as much money as
possible.

It is our government(s) that is letting us down. In fact it’s a shame that, these legal
battles are being fought, & millions of dollars will be wasted & spent
on these court battles! When what should
be happening is our Politicians, & Legislators should be writing new laws
to clear up these gray areas, & clearly define how Uber & companies
like them should operate in a clearly defined legal matter. They are elected LEADERS…..however we the
people are leading them….WE (drivers bringing up law suits), are leading them,
& forcing Courts to determine what its & what isn’t legal. When it CLEAR the labor laws are outdated
& there is this gray area!

Paul Wolff

Lastly, Business should be a level playing field, it is a BALANCE! Business SHOULD be a WIN, WIN, WIN situation.

#1 The Company wins….makes a profit.

#2 The Customers Wins…they get product or service they want.

#3 the Employee should make a fair & decent wage.

Also a Business can only offer a customer so many things
& that cant do ALL of them either…at least not FAIRLY!

A Business can give these items to their customers:

#1 A Product

#2 A Service

#3 Value

#4 Convenience (some might say that’s part of service)

If you think about that’s all a business can really give a
customer! AND……. A business cant give a
customer all of them & be profitable!

You cant have the best product, the best service, & be
the cheapest, & be the most convenient too.
Otherwise we would all be driving BMW’s & only pay $20,000 for new
ones, their service would be nearly free & there would be a dealership
within every mile. This would be a
Monopoly!

So we all know Uber is making a ton of money, regardless of
their undated report of losing money, they aren’t valued at $50 billion because
it’s a great idea & will make money SOME DAY…..”some day” ended 4 years ago
(Uber is 5 years old). We all know as
drivers, the customers are happy, because rides, & sales continue to
increase, and companies don’t lower rates when they are losing money, they
lower rates to drive out competition, & increase volume. It costs Uber NOTHING to lower rates….ONLY
the drivers are effected. Sales go up,
Uber makes more money. The drivers now
have to take more rides & assume more cost in order to make that same
amount of profit as before. Customers
are winning, they are getting rides in largely better & nicer cars than
with a taxi, Uber is winning obviously they are worth $50 billion dollars.

So whos the loser here?
The drivers! Granted many of “US”
as Harrys followers don’t see it because Harry & others have helped us
master ride sharing profitability, but those 100 of thousands of drivers that haven’t
read Harry website etc… These drivers
are ABUNDANT….you see them every day when you log in then turn on your rider
app & see all these drivers bunched up together & they all have a like
a 1 or 2 block acceptance radius. They don’t
even know to spread themselves out. For
us …Harrys followers, this isn’t necessarily a bad thing for us because we know
to go to the open areas & increase our acceptance radius.

The vast majority of drivers ARE losing! This is why you see drivers picketing Uber in
NY & SF etc… How can you picket a
company if you are not even an employee of it? THIS is how bad Uber treats
drivers in general. We …..with the help of Harry & his contributors, have figured
out our way around the pitfalls, and Uber wants us at odds, with other drivers,
divide & conquer. The last thing Uber
wants is us drivers to collectively bargain, or even worse form or join a
union.

Why? Because the first 3 things we are going to negotiate
for are:

#1 Tips added to the App – This cost the customer, Uber
wants them to them happy with lower prices.
And if customer begin to tip, they customer begins to see this as part
of the cost of the ride.

#2 Minimum Fares to be raised – This will drive away those
customers who only want a $5 to $10 ride, obviously a significant portion of
Ubers sales.

#3 Higher rates per mile – This making the customers cost
closer to that of a taxi. & resulting in a lose of sales.

Don Anderson

“If drivers were all employees, there is nothing that says drivers wouldn’t keep that same flexibility.”

This is absolutely correct. The case is over whether Uber is ALREADY exerting enough control over its drivers to make them employees. Not that Uber needs to control them more.

Drivers would absolutely benefit from employee status. They would benefit from any development that limited Uber’s ability to treat them like disposable parts.

PRN

Anyone remember the fable of the Goose that Laid the Golden Egg? The only reason Uber and Lyft are successful to this point is because of what they’ve done to this point. If you screw with that formula, you kill the goose, and none of us get eggs (except the lawyers).

Tom Houston

You think the eggs they give you are golden? Here’s a challenge for you? Take your last months pay divide it by hours online. Subtract all your gas 20% for taxes and $25 per wk for maintenance. What’s your hourly wage?

Tom Houston

Oh yeah also subtract cleaning your car. Do you provide water? Gum? Mints? Subtract that to

Chuck Koos

FYI, I just got invited to take part in a survey for Lyft. Same motivation as Uber, the questions clearly indicate Lyft wants ammunition in a lawsuit showing that their drivers prefer being IC’s.

Eekit’scommonsense!!

I hope the guys that are pushing the lawsuit are not going for full employment for all drivers. Most drivers signed up because of the advertising flexible hours, and if these three guys are shooting for certain hours, they forget that the nicest part about being a driver is the “on anytime, off anytime” schedule.

I don’t agree with Uber’s hands off policy with their drivers though. This only allows them to avoid paying any type of benefits, and as The Rideshare Guy mentions, sucks for full time drivers. Uber can’t just ignore that there are drivers that do this as a full time job, and they deserve more. They have to pay for EVERYTHING on their own, including taxes at the end of the year, which makes their hourly earnings way less than what everyone has been saying.

What’s the most an Uber driver makes a month as a 40 hour a week driver, realistically? $6000? Many would consider that good pay, but consider this:

When someone with a traditional job talks about their salary, they usually mention a number AFTER TAXES AND BUSINESS FEES ARE REMOVED… They also don’t have to pay 401K, health insurance, extra fees for vehicle inspections/requirements.

While Uber/Lyft and other TNC companies get away with it, it’s not realistic to take 20% of the fares. This makes it appear that drivers are getting more per hour, but when you break it down, I would be willing to bet that per hour pay is less than minimum wage in the lowest wage state… driving for ANY state. They are able to do it because the pay before everything is taken out appears attractive… realistically, they aren’t getting decent pay.

I went over the partner agreement very carefully, I as well as others, saw several issues right away with Uber’s logic, if your a subcontractor, then you have NO policies or rules to follow, period. You create your own rules, your own work schedule, your own expenses, you hire your own workers, you create your own policy on tips, etc.
As a 10-99 we don’t have to follow anything Uber says, NOTHING!!
We are essentially our own separate little company in Uber’s eyes. So if that is the case, then several things change.
1. We don’t have to listen to Uber’s policy on wait times for riders. We develop those rules as independent subcontractors ourselves. What Uber does have the right to, is asking us to provide OUR companies policy on wait times to Uber and the rider, and have them sign it. If they don’t like OUR policy, then they don’t have to give us work.
2. We surely don’t have to abide by, or follow Uber’s rating system. If Uber “deactivates” you based on ratings that your riders produced, you can sue them. In fact, since you are the subcontractor to the rider, the ratings should only be given to YOU, and NEVER to Uber. Does Uber do the driving? Then why would Uber receive the reviews for something that THEY DON’T DO??
Uber does two things, they connect YOUR company to riders that need a ride, and secondly they are the electronic payment system used between YOUR company and the RIDER.
3. For Uber to tell YOUR clients that tipping is not necessary, is also against the law.
You’re an EMPLOYEE if you follow any rules set by a company.

It’s weird, a lot of the policies in there don’t seem to be enforced by Uber, just another reason why it’s good to have lawyers representing you in a class action type suit. Can’t trust these guys…

About

I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder. Read More…

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